Muskrat Falls is not a done deal

Nobody is saying much about it right now, but the Muskrat Falls project is in trouble.

Nobody is saying much about it right now, but the Muskrat Falls project is in trouble.

Not that it’ll suddenly be cancelled, but the original deal involving Nalcor, Emera, Nova Scotia, Newfoundland and Labrador and the federal government is all but dead.

The federal loan guarantee, which we appear to require to complete the deal, won’t come our way if Nova Scotia walks, and the newly elected Liberal government there seems to be lacing up its boots.

Nova Scotia Premier-designate Stephen McNeil has made it clear things have changed, despite the views of Premier Kathy Dunderdale.

“I can be very clear to (Dunderdale) that if it’s not in the best interest of Nova Scotia ratepayers, then we would not be supportive,” he said the day after the election.

McNeil said they want more power at cheaper rates if his government is to sign on, and added this little nugget: “Unless we see something new, Muskrat Falls is where it is, which is on the drawing board.”

He may as well have said the chopping block.

Dunderdale discounts McNeil’s comments, saying the agreement is between Nalcor and Emera, and Emera will sell the power to Nova Scotia.

Fair enough, but there’s a problem with that thinking. What if Nova Scotia doesn’t like the price or the amount of power?

McNeil put it this way: “I think it makes a lot of sense that if Emera and its shareholders believe this is such a great project, then build it and we’ll just buy the energy at a reasonable price.”

But what price, exactly?

Still, Dunderdale is not deterred.

“As I have said a number of times before, when we plan these kinds of projects and enter into these kinds of agreements, we always examine every possible challenge, occurrence that might have some significance … and we provide remedies to that.”

What remedy applies if Nova Scotia decides not to support the project and both the loan guarantee and the Maritime Link are lost?

Dunderdale doesn’t think that will happen or that a change of government in Nova Scotia is anything to be concerned about.

“We would never allow ourselves to be this far into a project and have a government come in and scuttle the whole piece,” she says.

I guess if that should happen, it would make Danny Williams right, and we will “go it alone.”

Dunderdale insists the project makes sense even if there was no Maritime Link or loan guarantee. She’d better be right, because all indicators point to big problems with this deal.

McNeil says it comes down to power rates. If Muskrat Falls power is cheaper and they can get lots of it, they’re in. If not…

“Our issue has always been the deal itself,” he says. “We felt that the ratepayers are taking all the risks. If there is a new deal coming forward, it’ll go before the regulator, and we, like all Nova Scotians, will take a look at it and make sure its in the best interest of the ratepayers.”

What does he mean by a “new deal coming forward”?

McNeil wants to start fresh. That opens up all kinds of possibilities, including complete deal collapse.

And don’t think McNeil is playing some kind of high-stakes poker, hoping to get a better deal.

He’s in the catbird seat and knows it; he’s not the one rolling the dice.

Last week, Nalcor awarded a billion-dollar contract to an Italian company that has never worked in Canada, without any kind of final financing package in place. How that’s justified under any kind of business model is beyond me.

Nalcor and the province are embroiled in a serious court case in Quebec over water rights, which could kill this deal on its own. Now one of our principal partners could take a hike?

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Hank

November 05, 2013 - 20:29

The power that is created by harnessing a water falls that Flowed for thousands of years
and will flow for thousands of years more turning the generator turbines at no cost , Creating Clean,reliable, Dependable power, Is the Cleanest,most reliable, safest and Cheapest source of power in the WORLD.

Randy Simms needs to take note there are five serious lawsuits against the project, not just one. The Nunatsiavut lawsuits for istance target the construction of the dam itself. Media here really needs to start seriously explaing to people what is happening. So far that is a very serious failuer on their part.

LOL...Really. Randy, Can you recall on many occasion, you said if we wanted the best people in the HOA, to represent us, We would have to pay the money for the best...LOL...Look like we got the best...And history is about to respect itself, with this liberal leadership race. If the people kick out the PCS, will we be any better of with the liberal? My answer is no.

Hmmm thing is I live near the project. Its tearing our land apart there has been so much damage to the environment because of this deal that is horrific to us who are dealing with the crap that has come to our area. No one is considering how we feel. Dunderdale has plugged away with no consideration to the people here.
What price do we have to pay? Too much. There are reports that Agent White which was banned for pesticide use in the province is being used here. There needs to be our needs and what happens if the project is a dud? This province will pay the price for greed and ignorance.

This government has no mandate to proceed with the project in the absence of a loan garuntee. The DG3 numbers presented by Dunderdale and Nalcor to support the vote I the house of assembly had the benefits of the loan garuntee included. Without the FLG, and with current oil projections, muskrat falls is not the lowest cost option, even when you only consider 2 options. This project should be immediately halted, and the 1 billion contract put on hold, until the Emera situation is resolved, and things are sorted with hydro Quebec.
This project is indeed in big trouble. All the risk is with us. Poor and premature decision making has got is to this spot.

Very well said Mr. Simms. It's been said that "a wise person learns, not from their own mistakes, but from the mistakes of others". I suspect the premier's 'remedy' (for no deal with Nova Scotia) could be found in her late day, back against the wall discussions with Quebec.----- A great way to negotiate with Quebec no doubt. Practically the identical position Joey Smallwood put himself (through Brinco) in when their money had prematurely been spent on the Upper Churchill, and to avoid bankruptcy, Brinco was forced to sign off on the 70-year giveaway to Quebec. The more things change......

Mr. Simms, Muskrat Falls was fatally flawed from Day One, despite the initial euphoria or the announcement. For the record, I will state that I had high hopes for it when it was announced. However, it quickly became apparent that there were nagging details and potential problems that the government was ignoring. Some fine people began to point out these inconsistencies......only to be called "naysayers".
The whole deal is rotten to the core, despite the Premier's assertions, and is what I believe ultimately led to Jerome Kennedy leaving in such haste. It is a scandal in waiting .......but one that we will reap the "rewards" from, primarily because we placed too much faith in a "legacy" Premier...and all of the minions who chose to go with expediency over principle.

Awe Randy: You're making it sound like Nalcor is desperate to find financing for this deal. Federal Government bonds have already been approved in principle, but Nalcor has options beyond what Ottawa has offered. The question is--who will be in on the financing. and how can they make it affordable for all Newfoundlanders, especially future generations. If Newfoundland starts enjoying higher wages and increased prosperity--what's a few extra dollars on a hydro bill? In the grand scheme, Newfoundland needs this project to move ahead with the least amount of negativity attached. Ultimately we will look and be, more appealing for future investors in our province.

With or without Nova Scotia, this government doesn't seem to be too afraid of spending our money on the MF project. They're already pouring our tax money and revenues into the project right now. Meanwhile, jobs and services are being job all across this province. Once upon a time working in health care and education was as good as winning a lottery, people envied you. Now, people curse themselves for working in those fields, there's no job security and hard to get fulltime positions are being eliminated; casuals and part time workers have no where to go. Meanwhile, money is flowing freely at Muskrat Falls; our money. Stop now, take the loss and start rebuilding our province; whatever kind of experiment the Tories have been working on has failed.